Underlying inflation is growing for the first time since December 2022, with chances of a mortgage payment-easing interest rate cut next week all but gone.

NEW INFLATION RATES

* The consumer price index rose 1.3 per cent in the September 2025 quarter and 3.2 per cent annually, according to the Australian Bureau of Statistics

* This is the highest quarterly rise since March 2023

* Trimmed mean inflation, the Reserve Bank’s preferred measure for determining whether to cut interest rates, also rose this quarter

* The new rate of three per cent is up from 2.7 per cent in the June quarter

* Monthly inflation also rose 3.5 per cent in the year to September, up from three per cent in August

DRIVERS OF THE RISE

* Electricity costs are the main culprit having risen nine per cent in the previous quarter

* All capital cities saw power price rises in July after annual price reviews took place

* Households in NSW and the ACT also did not receive the extension of energy bill relief subsidies in July, affecting the cost of electricity in those places

* Other big risers included recreation and culture as well as transport

* Holiday travel and accommodation rose 2.9 per cent while fuel prices rose two per cent

* Housing (5.6 per cent), food and non-alcoholic drinks (3.1 per cent) and alcohol and tobacco (5.5 per cent) were the main drivers of monthly inflation

HOUSEHOLD GOODS AND SERVICES

* Higher prices for eating out and takeaway have elevated food inflation by 3.3 per cent compared to this time last year

* The morning coffee run has also skyrocketed with a 14.6 per cent rise in coffee, tea and cocoa prices

* Rent (3.8 per cent) and medical costs (5.1 per cent) continue to drive up services inflation

WHAT THEY SAID

* “Inflation has ticked up today, but it’s much lower than what we inherited, and that reflects the substantial progress we’ve made together in our economy.” – Treasurer Jim Chalmers

* “These results speak to Jim Chalmers’ failure on economic management.” – shadow treasurer Ted O’Brien

Tom Wark
(Australian Associated Press)